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Are my Medicare expenses tax-deductible?

Tax season is upon us, and many Americans are eager to identify deductions that could potentially reduce their total tax liability. If you’re a Medicare enrollee who meets certain conditions, you may be eligible to deduct some of your expenses—including Medicare premiums—for the year. In fact, you’ll probably be surprised by just how many of your medical expenses you can deduct. Continue reading to find out if your Medicare expenses are tax-deductible.

Am I eligible to deduct my Medicare expenses?

If you have spent more than 7.5% of your Adjusted Gross Income on Medicare and other health or dental expenses, you may deduct any of those additional expenses that are considered “allowable” by the IRS.

Which medical expenses are “allowable” or tax-deductible?

Surprisingly, the IRS’ list of allowable expenses is fairly comprehensive. In fact, many of the costs associated with the diagnosis or treatment of an illness or injury are considered “allowable.” Everything from preventative care services and medical equipment to transportation to obtain health care services are considered tax-deductible. That’s right: you can even deduct your taxi fare or Uber ride to the hospital!

Here is a quick breakdown of some of the most common expenses deducted by seniors. You can find a comprehensive list here on the IRS website.

Medicare Premiums

Any premiums you pay for Medicare Part B, Medicare Part C, Medicare Part D, or Medicare Supplement plans are considered “allowable.” Most Medicare enrollees do not pay a premium for Medicare Part A. However, those who do can also include those costs when calculating their deduction.

Out-of-pocket costs

Any deductibles or copayments you make to receive health care or Medicare-covered services are considered allowable. Additionally, any out-of-pocket costs you pay for prescription drugs while in the Part D donut hole are also eligible for deduction. Furthermore, you may deduct any expenses that you pay out-of-pocket to obtain care not covered under Medicare. This includes the costs for routine checkups, dental care, nursing home treatment, and equipment deemed “medically necessary.”

Other popular services that are considered allowable:

  • Acupuncture
  • Ambulance services
  • Annual physical exam
  • Artificial teeth
  • Chiropractic services
  • Contact lenses
  • Dental services
  • Eye exams & eyeglasses
  • Guide dogs and other service animals
  • Hearing aids
  • Home care & nursing services
  • Laboratory fees
  • Long-term care
  • Oxygen
  • Psychiatric care, psychoanalysis, and psychological care
  • Therapy
  • Vasectomy
  • Weight-loss programs
  • Wheelchairs
  • X-ray services

Which expenses are not “allowable” or tax-deductible?

Late penalties on Part B or Part D premiums are not eligible for deduction. Similarly, you may not deduct any prescription drugs purchased abroad. Likewise, nonprescription drugs—like supplements or vitamins—are not usually considered allowable. However, if your doctor recommends one or more of these nonprescription drugs to treat a particular medical condition, you may be able to deduct them.

Here is a list of common non-allowable expenses. You may not deduct these costs from your taxes.

  • Babysitting or childcare
  • Cosmetic surgery
  • Electrolysis or hair removal
  • Funeral expenses
  • Hair transplants
  • Personal use items (toothbrushes, floss, toilet paper, etc.)
  • Teeth whitening
  • Veterinary fees

Need help identifying which of your Medicare expenses are tax-deductible?

One of Renew’s licensed Medicare consultants would be happy to help. Give us a call at 1-888-874-2197 (TTY 711); we’re available to assist you any time between 9am-5pm PT, Monday through Friday.

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